Natco Pharma Reports Mixed Q1 Results Amid Pricing Pressures
Natco Pharma's Q1 results show a slight revenue decline of 1.4% to ₹1,390.60 crore, with net profit down 28.2% to ₹480.30 crore due to U.S. pricing pressures and increased R&D expenses. EBITDA margin remained strong at 45.5%. Segment-wise, Crop Health Sciences grew 122.4%, API 34.2%, while Formulations Export declined 6.9%. The company declared an interim dividend of ₹2 per share and plans to increase its Authorized Capital to ₹45 crore.

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Natco Pharma , a leading Indian pharmaceutical company, has announced its financial results for the first quarter, revealing a mixed performance amidst challenging market conditions.
Revenue and Profitability
The company reported consolidated total revenue of ₹1,390.60 crore for the quarter, compared to ₹1,410.70 crore in the same period last year, marking a slight decline of 1.4%. Despite the revenue dip, Natco Pharma maintained a robust EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of ₹632.70 crore, with an impressive EBITDA margin of 45.5%.
Net profit for the quarter stood at ₹480.30 crore on a consolidated basis, down from ₹668.50 crore in the corresponding quarter of the previous year, representing a decrease of 28.2%. This decline in profitability was primarily attributed to pricing pressures in the U.S. product portfolio and increased R&D expenses on high-value projects.
Segment Performance
Natco Pharma's performance across various segments showed mixed results:
Segment | Current Quarter (₹ Crore) | Previous Year Quarter (₹ Crore) | YoY Change (%) |
---|---|---|---|
Active Pharmaceutical Ingredients (API) | 52.60 | 39.20 | +34.2% |
Domestic Formulations | 107.00 | 102.20 | +4.7% |
Formulations Export | 1,126.50 | 1,210.10 | -6.9% |
Crop Health Sciences (CHS) | 34.70 | 15.60 | +122.4% |
Other Income | 69.80 | 43.60 | +60.1% |
The company witnessed significant growth in its Crop Health Sciences segment and API business, while the Formulations Export segment faced challenges, likely due to the pricing pressures mentioned in the U.S. market.
Dividend Declaration
The Board of Directors has declared an interim dividend of ₹2 per equity share of ₹2 each. The record date for this dividend is set as Tuesday, August 19, with payments commencing from August 26.
Corporate Actions
Natco Pharma also announced several corporate actions in its board meeting:
The company plans to increase its Authorized Capital to ₹45 crore, divided into 22.5 crore equity shares of ₹2 each, subject to shareholder approval.
The 42nd Annual General Meeting is set to be conducted through video conferencing or other audio-visual means, with the date and time to be fixed by the Chairman and Managing Director.
Outlook
While Natco Pharma faces challenges in its U.S. formulations business, the company's strong performance in other segments, particularly Crop Health Sciences and APIs, demonstrates its diversified portfolio strategy. The increased R&D expenses on high-value projects suggest a focus on future growth and innovation.
Investors and analysts will be keenly watching how Natco Pharma navigates the pricing pressures in key markets and capitalizes on the growth in its emerging segments in the coming quarters.
An earnings call is scheduled for August 13, where management is expected to provide further insights into the company's performance and future strategies.
Historical Stock Returns for Natco Pharma
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
-3.30% | -7.47% | -10.49% | -0.99% | -40.06% | +5.41% |